Needles, Blood, Silicone, & Smoke

[Note: This is another blog based on my weekly emails to my family on the mainland.]

3/25/23

 

Aloha All!

 

I don't have any hard evidence, but I wouldn't doubt that we've had a real uptick in weather refugees from California visiting us here in Hawai'i..  Definitely a challenging winter there lately, and of course in a lot of other places on the mainland, too.  No great challenges here -- unless you count deciding on which pair of shorts to wear today...

 

A lot has happened since I wrote last.  A week ago Tuesday I saw my retina doctor and, as expected, I got an eyeball injection.  There was definite edema buildup but we caught it early and since then my acuity in the right eye has improved considerably -- still not great, of course, but back to the best I can expect, about 20/100.  The good news is that the steroid cream I was using to get rid of the thingy on my thigh didn't increase my eye pressures as I feared it might.  It sure did the trick on my leg, though, and that spot is finally healed.  In other medical news, I got my routine blood work done last week and yesterday I saw my crackerjack internist to review the results.  I had already seen the report and compared it to my previous tests, though, because the lab sends them to me online. Everything seems good, including the PSA (prostate) test and the CRP test (coronary inflammation marker).  I know I complain about my doctor but I do approve of this 6-month routine blood analysis because it should catch problems early -- a very good thing for geezers.

 

On the home-front, my main project was to clean and reseal the flagstone decking around our pool.  This natural stone is very attractive, but it requires regular maintenance to keep it that way.  I'm afraid I let this slip a bit too long, so it was extra work this time to get it back into shape.  First, I sprayed the whole thing with a bleach solution to kill moldy spots, then I power-washed the entire surface, applied another bleach spray, and finally sprayed on a silicone sealer.  Besides being tedious, this job required repositioning most of the lanai furniture a couple of times to treat underneath.  Fortunately the weather cooperated over the several days it took to do the job and I now declare it done.  If I reapply the silicone every 9 months or so it shouldn't require any other maintenance. Whew!

On the techno-front, our new credit card account seems to be doing fine -- no new hacks.  I got nearly all of our automatic payments changed to the new card, and while I was at it I changed any that would allow it to Pay Pal.  This way if the card is compromised again, it will be easier to change the Pay Pal link to the new card account, rather than changing each company.  I also like the fact that my card # isn't on file with each merchant, some of whom might have less than the best security arrangements.  Pay Pal is a juicy target for ne'er-do-well hackers, of course, but I'm sure Pay Pal has extremely high security to protect themselves and my info.  There are other payment services besides Pay Pal, but I already had an account and I often use it for quite a few online purchases. Also going well so far are my sound system receiver and my new (old) phone.  The phone looked almost brand new -- I couldn't see any scratches or marks on the outside at all.  And so far it is working perfectly, including the sound features that the original had problems with.  I used the Samsung transfer utility to copy all my old apps, data, and settings to the new phone fairly quickly.  I did have to log in to a number of apps again, though, and a few settings didn't transfer.  Also, I had to transfer the carrier sim card from the old to the new phone, but the service registered the new device automatically and in a few minutes I could make and receive calls and texts, as well as switch to cellular data if I wanted to, or when I was away from our home wifi.  For now I've opted not to go the "e-sim" route until the techies implement a way to make it easier to switch e-sims between devices. I've got 90 days to return the phone if there is a problem, but so far it has been great.  I will probably jinx things by saying this, but at this moment all my techno-toys are working!!

 

Makalei Fan Gallery

Karen and I worked out on Tuesday, and played 16 holes at Makalei on Thursday with Karen's golf buddy.  I did ok, with some rather amazing shots but also a lot of mediocre ones.  Karen did very well, including getting a zero-putt birdie on a par three hole.  We've now added a couple of new Kon-a-Lago rules:  on fairway shots, anything less that 20 feet doesn't count; and on greens, if the ball hits the pin it's "in."

 

Today is my Quitting Smoking Anniversary. I finally managed this in 1994, after smoking for 40 years.  Here's some fun math.  I started smoking when I was 10 (the evil influence of my two older sisters).  It has now been 28 years after quitting.  28+10=38.  That means in two years I will have been smoke free for as long as I smoked.  Given that I spent 1/2 of my life puffing away, I should be grateful that so far only a moderate-to-severe case of emphysema is the result.  Note the "so far."

Ok, off for our usual routine of market and beach breakfast picnic.  Hang in there. Winter will end someday....

Tax Tips in Troubled Times

Here We Go

Way back in 2011 I offered some tax tips to help people cope with the angst of filing season (see Tax Tips for Tea Time, 3/1/11).  That seems so long ago and so much has happened in the intervening 12 years that I thought I'd update my advice as we approach this year's deadline.  As noted in the title, this year we are dealing with this chore in the midst of a congressional melt-down over the debt ceiling, debates about lowering/increasing taxes for those who are financially challenged, raising/lowering taxes on the financially fortunate, cutting/increasing government spending on health, education, climate, and military programs, etc., etc., etc.. And since we now live in the age of confrontational, oppositional, post-factual, and post-civility politics, all this is at a volume almost guaranteed to land the average tax payer in scream therapy.

So, what's changed in the past 12 years? Rather than try to present a comprehensive and mind-numbing answer to that question, I'll focus on two aspects of taxes that seem most pertinent: refunds and effective (versus marginal) tax rates.

Refunds

Back in 2011, roughly 76% of tax payers got a refund averaging just under $3000.  That amounted to a total of about $319 billion, which was 34% of the total collected from individual returns. Even now, with inflation over the past 12 years, that's a LOT of money.  At that time, I pointed out that the "windfall" of a refund was actually just a return of people's own money, refunded to them after a year of it not being used for rent, medical bills, groceries, and occasional fun things.  I suggested that anyone in the group receiving $3k or more who believed that taxes were too high should have realized the contradiction of willingly over-paying taxes they thought were excessive on the one hand, and giving the government what amounted to an interest-free loan of $319 billion on the other.

So, what's changed in the last 12 years?  Not much, actually. According to IRS statistics for the intervening years, the average refund over the past 12 years has been about $2800 with the exception of a dip to $2549 for the Covid year 2020 and a rebound to $3252 in 2022. The variation in the average refund amount has been quite small, generally + or - about $250, and the percent of filers receiving refunds has been consistently about 75% , +/- 2%.  In short, most of us have continued to contribute generously to the interest-free government loan that averages about $320 billion each year.

There are two aspects of the yearly trend that have, indeed, shown changes.  First, the percent of returns being filed electronically has risen steadily from 77% in 2011 to 90% in 2022.  I suspect this reflects the growing incorporation of internet technology into many aspects of our increasingly online lives.  More evidence of this is the proportion of refunds that were electronically processed via direct deposit, which has grown from 72% in 2011 to 91% in 2022.  This can definitely speed up the refund process, since it is less reliant on human intervention and physical systems that require time and resources.  The IRS says that about 90% of refunds are issued within 3 weeks after a return is accepted.  However, the other 10% can take much longer, as I've personally experienced for the past couple of years. If there is something missing, incorrect, or if your return is selected for verification (as mine was this year) you will have to wait longer, maybe weeks or months longer (see Saving to Invest).  I submitted my return this year on Feb. 1, and received confirmation that it was "accepted" within a few hours.  My refund is much less than the average (I'm proud to say), but I'd still like to have it. It is now March 15 and my return is still "being processed," even after taking an extra step of providing validation information.

The main way to reduce your refund and keep more money in your pocket during the year is to adjust your withholding via Form W-4.  Another way, for those of us who make quarterly estimated payments, is to make these as accurate as possible, even adjusting them during the year if circumstances change.  Finally, for those who are required to make minimum withdrawals from an IRA, the percent you elect to be withheld can be changed with each withdrawal if necessary.

Although a tax refund can feel like a windfall, it most certainly isn't.  Some argue that overpaying forces them to save money during the year, and that they might not do so otherwise.  This may be true, but there is a hidden price for this forced savings.  Here's an idea that will accomplish the savings and even earn you some money.  Divide the usual amount of your refund by 12, then set up an automatic deposit of that amount each month into a bank savings account, kind of like a Christmas fund. On a specified date take the money plus interest and rejoice at your "refund!"

Marginal Versus Effective Tax Rates

A lot of confusion surrounds the question of how much we actually pay in income taxes.  The tax total in dollars is clear, but how that total is arrived at isn't.  An example of the confusion appeared in a Letter to the Editor recently published in my local newspaper.  The author bemoaned the high tax rate levied on those with incomes greater that $539,000, which placed them in the 37% tax bracket. This forced them, according to the writer, "to pay 37% of their incomes in taxes." 

The confusion here is between a taxpayer's marginal versus effective tax rate.  U.S. income taxes are "progressive," which means that income up to a certain point is taxed at given rate, and income above that level is taxed at a higher rate.  The rates for each increasing portion of a person's income are the marginal rates, the maximum of which was 37% for 2022.  But only the amount above $539,000 would be taxed at that rate -- the income up to that point would be taxed less.  Dividing a person's total tax bill by their total income yields the effective tax rate for that person, the true bottom line -- the proportion of their income that went to taxes.

The difference between the two rates can be dramatic, and a very strong case can be made that it is the effective rate that should be the focus of debates over whether income taxes are too high.  For example, Business Insider presents data for the 2020 tax brackets that shows for the most common bracket of 22% (incomes from $50k to $75k), the effective rate was 7.2%.  For the next most common bracket of 24% (incomes of $100k to $200k), the effective rate was 10%.**  A similar analysis by The College Insider indicated that using 2022 data, a person with an income of $60k (22% tax bracket) would have an effective rate of 9.9%. Finally, a Tax Foundation analysis of IRS data shows that the average effective rate for all taxpayers in 2020 was 13.6%.  For those in the 37% bracket (incomes greater than $539k, averaging $1.7 million) the average effective rate was 26%. 

Effective rates have not remained the same over the past 12 years, but the changes have been less than you might think. A highly-touted tax reform bill that was enacted in 2017 changed the marginal values and adjusted the income cutoffs for some rate brackets with the goal of lowering taxes.  This did indeed lower the effective tax rate for taxpayers in all income categories, as documented by the Tax Foundation.  But their data show that the magnitude of the effect was 1.5% or less for nearly all income categories for 2018-2020).  For the average taxpayer this amounts to a reduction of $250, and a reduction of $69 for those in the most common bracket (Business Insider).  Many people spend more than that in a year for mocha lattes.

Now, we can certainly argue whether the effective rates are too high (or too low), but at least we're focused on the right thing. So, one tip for 2023 is the same as it was in 2011:  concentrate on what your tax rate actually is, not misleading sound bites about marginal values. 

Bottom Line

In summary, I think there are two main points to be taken from the analyses above.

First, the promise of a refund is perhaps the only positive thing about filing your income taxes each year.  But it can't negate the fact that a refund is money that perhaps you shouldn't have parted with in the first place, and there is a hidden cost to what may seem like a "windfall."

Second, the question of how our tax bill is calculated is ambiguous enough to provide politicians with an abundance of opportunities for puffery and hyperbole. The bottom line provided by focusing on effective tax rates is a much more down-to-earth place to begin a discussion of raising or lowering the tax burden. 

Happy filing!

______________________________________________

*I've updated the figures from those given in my original blog using more recent data from the IRS archives.

** To calculate the effective rates the middle income in the tax bracket was used (e.g., $150k for the $100k-200k bracket), which was divided into the average tax paid by people in that bracket.

Techno Troubles, Credit Card Hack

[Note: This is another blog based on my weekly emails to my family on the mainland.]

3/11/23

 

Aloha, Familycicles ---

 

My week has been focused on overcoming modern dependence on technology.  As I mentioned in my last email,  I've had several encounters with the not-so-convenient side of tech.

 

I'll start with the most recent one.  A week ago last Thursday we got an email from our credit card company asking if we had made a specific charge that their system had flagged as suspicious.  We hadn't, and when I checked our account online I found a few others that we hadn't made, either.  I replied "no" to the email, which immediately froze the account. The company issued new cards with a different number, supposedly to arrive "2nd Day Air," (a joke here in Hawai'i, in the same category as Amazon's "Same Day Delivery." ) This is a rewards card we use frequently, and it's tied to a number of services that are charged automatically (like monthly renewals of our internet, tv channel subscriptions, cell phone service, etc.), so we were eager to get it replaced. We have other credit card accounts, so we weren't entirely thrown into the dark ages of cash and checks, but switching would be a major inconvenience.  Anyway, on Saturday we got another email about another suspicious charge -- this one using the new number, despite the fact we hadn't yet received the cards!  I had a long chat with the security folks about how this could happen.  At first they suggested somebody here had intercepted the new cards, but I finally convinced them that they hadn't even been delivered (in fact, the cards showed up on Monday afternoon).  The new numbers were cancelled and second set of cards were sent.  The agent was puzzled but then discovered the card info had been linked to a Google Wallet (which we don't have), allowing it to be used without being physically present and which is automatically updated if the account number or expiration date changes (!).  The agent was able to shut down the link, and presumably this should take care of the problem.  It isn't clear how and when the nefarious ne'er-do-well got our credit card info. We are usually very careful with it -- we even cover our security code on the back of our cards.  However, traveling involves many times when your credit card can be out of sight for a few minutes and give some bad actor easy access to the information. Making purchases online exposes it as well, unless you use something like PayPal or a digital wallet like Google's or Apple's.  Anyway, we got the 2nd replacement cards on Wednesday and so far so good.  Geez, what a pain, however.

The other two techno-problems have been with devices.  First, about a week ago my stereo receiver (less than two years old) suddenly stopped streaming content to our t.v..  I spent several hours trying to pinpoint the problem (different cables, different t.v.'s, different ways of connecting, etc.) before concluding the problem was definitely in the receiver.  The next step was to try to get warranty repair, which likely would have involved sending the unit to some facility off-island and waiting for it to get fixed.  My techno-savvy neighbor then suggested what I should have thought of myself --- REBOOT.  This is usually my go-to first step in solving most techno-problems, but this time the receiver programming seemed like a long shot.  Well, I did the reboot and voila! Problem solved.  It may have been that during all the stormy weather we've had lately an electric surge or some lightning-produced static electricity somehow zapped the firmware code.  Anyway, except for the hours of hassle and about a week of reduced quality sound, everything is now fine.

Finally, about the same time as the receiver problem, my 3+-year-old phone developed two issues in a row.  First, the charging port went kerflooey.  I was still able to charge it wirelessly, but not with a cord, a definite inconvenience while traveling, say while on a plane. I took it to a local cell phone repair shop and got the port replaced in just a couple of hours for less than $100.  All is good, right?  No.  A couple of days later I noticed problems with some of the sounds -- incoming text notifications were no longer triggering an audible signal, and sometimes an incoming call sound starting fairly loud but then quickly became very faint.  I checked all the settings, REBOOTED, and went into the geekosphere to look for solutions.  Nada.  I took it to the repair shop and the technician verified that according to the software settings it should be working.  She also insisted that replacing the charging port couldn't have caused the sound issue.  As a last gasp effort, I did a factory reset of the phone which is more than just a reboot because it resets the phone software completely.  Still didn't help.  My solution is to get a new phone --- well, not new-new.  I've ordered a certified refurbished one that should arrive in the next few days.  This was much cheaper than buying a new pristine phone, and since it is the same model as the old one, I don't have to relearn how to use it.  If this would have happened a year or two from now I would have welcomed the chance to upgrade to the latest and greatest, but it seemed hard to justify at the present time.  Anyway, I'll keep you posted on how this works out.

Ok after this long litany of techno-woes, I will close on a more positive note.  We've had some gorgeous

Spot the Ball

weather this week, the solar pv system is really cranking, the pool temperature has become comfortable enough for us to do our daily workouts, and we were able to get in 16 holes of golf on Thursday.  Alas, the weather was far better Thursday than my performance, but it was still an enjoyable outing.

Off to market and a beach breakfast picnic.  Take care.  Praise be to the center!

Dumper, Waikablowa, "Disaster!"

[Note: This is another blog based on my weekly emails to my family on the mainland.]

3/4/23

Aloha Muffled and Bundled Ones --

Our weather played a pretty big part of our week here, a rarity. It began as we were finishing our picnic breakfast at Kahilu'u Beach, a couple of miles from our house. A rather ominous looking bank of black clouds moved in from the ocean, and as we were packing up it started to rain. We ran for the car parked in the nearby lot and quickly put up the convertible top, though not before the inside got a bit wet. The rain then *really* came down, and it continued all day, through the night, and a good part of Sunday -- 2.5" total. Other parts of the island got even more. Wow, what a dumper.  

The next few days were pretty good, and we made up for our two crappy days over the weekend. Until Wednesday. We drove up the coast to Waikaloa Resort where we met our Ohio Friends for lunch at one of our favorite restaurants -- Tommy Bahama. Locals have nicknamed this area "Waikablowa" because of the

Glad it fell That Way!

strong winds that frequently blow through the gap between Mauna Kea and Mauna Loa from the east. The gap acts as a venturi which makes the wind pick up speed, and it can sometimes be strong enough to be damaging. These are tradewinds on steroids. The same thing happens in the channel between Hawai'i and Maui, which is notorious among boaters for the strong wind and ocean currents. Before meeting our friends we stopped at a nearby beach to do some whale watching, but we gave up because the wind was so strong. In the parking lot the wind even uprooted a tree while we were there that fortunately fell away from the cars. It wasn't windy at home when we returned about 6 because we are sheltered by our local volcano. Around midnight, however, the wind somehow found its way to our part of the coast, and for a couple of hours it howled, bringing with it about .3" of rain. It was really kind of scary at times. Our poor lanai umbrella wound up in the pool again for the second time this winter. Fortunately that was about the only damage around our house. Some big limbs in the neighborhood came down, but overall the immediate area was ok. The next morning it was still raining, and even though the wind had died down, conditions weren't favorable for wimpy golfers -- we cancelled our Thursday outing at Makalei. Things just seem to get weirder and weirder.

 

Apropos of the weather, last night we went to our community theater production of the musical "Disaster." It was a fun, over-the-top parody of disaster films, borrowing heavily from The Poseidon Adventure.  The actors did a very credible job, and about five of them had very good singing voices.  It still impresses me with how much local talent we have.

In more mundane news, I managed to get my lanai bench re-stained during a lull in the wet weather, and we managed to work out at PF on Tuesday. We had a beach picnic afterward, and again on Thursday in lieu of golf. I've also been dealing with a couple of techno-troubles, but I think I'll wait until next week to fill you in on them.

Take care. Keep that frostbite kit handy.